To note
Like charity, eradication of poverty begins at home. And no amount of alms will ever cover the face of poverty.

Baby-Steps on Bay Street

Bay Street is the Canadian equivalent of Wall Street. In Canada, most affairs financial happen here. I live in Canada. So, I tend to write in Canadian context. That being said, the news that one does not require university-level math skills to understand financial statement is very comforting. With the rudimentary knowledge of math, one could, then, look at various facets of a company, namely: profitability, debts, cost of goods sold, management efficiency, return on invested capital, price/earning ratio, dividend pay out ratio, growth of earning etc. One looks at these numbers not just for one year but for several, say, 5 consecutive years, at least. The objective is to assess consistency of company prosperity or lack of it, in a fairly large window of time. Records of the past do not guarantee future performance. Very true! However, one can assume with certain degree of confidence that the company may repeat its past. A good deal of research and understanding of the business are also essential for making a sound investment decision. There is no substitute for that. A company, with robust growth in earning and happens to be selling at undervalued price, could be considered a bargain. When searching for undervalued stocks, turn-arounds are a good place to look at. However, as the wise ones would say, "Remember, turn-arounds do not usually turn around." Instead, "Look for boring businesses with solid growth-potential which manage to stay below the competition-radar. They, usually, are good investment candidates."

To all visitors,
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